2. Di Susun oleh :
Singgih Heri Purwisatoto
( Revenue Manager Eastparc Hotel Yogyakarta )
3. Objective & Standard
Objective :
The main objective this training is
participant understand the purpose
of revenue management
4. Objective & Standard
Standard :
We can develop culture of Revenue
Management in this hotel, not only
how to getting revenue but we can
implementation how to maximizing
hotel revenue
5. AGENDA
• What is revenue management
• Forecasting
• Comp Set analysis
• Revenue management Strategies
• Measurements
7. Revenue Management Fundamentals
Management technique that help
us to Selling the Right Room to
the Right Client at the Right
Moment at the Right Price on the
Right Channel
9. Revenue Management Fundamentals
What makes hotels suitable to be able to apply Revenue Management
• Fixed capacity (Kapasitas yang sudah tetap)
• Perishable product
• High fixed costs and low variable costs (tingginya Fixed Cost dan
rendahnya Variable Cost)
• Product can be priced differently (Produk yang bisa dibeda-bedakan
harganya)
• Demand evolves (Pengaruh permintaan)
• Product can be sold in advance (Produk bisa dijual terlebih dahulu)
• Market can be segmented (Pangsa Pasar yang bisa dipilah-
pilah/dibeda-bedakan)
10. Yield management
• Yield management is a variable pricing strategy, based on
understanding, anticipating and influencing consumer behavior
in order to maximize revenue.
• The non yieldable market segments are the bookings which you
can not reject even if you could sell at a higher rate on those
dates i.e. Last Room Availability (LRA) corporate contracts, Tour
Operators allotment, etc.
Rest all of business you can yield & apply revenue management
11. Ingredients
Create effective hotel revenue management by :
• Competitive Analysis
• Market Segmentation
• Historical Demand and Booking Patterns
• Demand Forecast and Displacement Analysis
• Pricing and Inventory Management
• Overbooking patterns
• Information Systems
13. Who is your Compset
Define who your competitors by asking “What hotels can I steal share from, and
which hotels can steal share from me?”
Sometimes a hotel needs more than one comp set based on its business mix as
each business segment may have a different set of competitors
Defining which hotels your property competes against helps you understand how
to sell, market, price and position your hotel
Once you have properly defined your comp set, you should constantly watch what
your competitors are doing, how they are selling and where they are selling
15. Market Segmentation
• FIT / Walkin
• Online
• Corporate
• Government
• Wholesale
• Retail TA
• Others
16. Hotel Distribution Channels
Hotel Reservation System
Global Distribution
System(GDS)
Internet Distribution
System ( IDS )
Channel Manager
Revenue Management
System
Rate Shopping Tool
18. What & Why Forecasting
Some says it is an educated guess
In order to relate accurate occupancy prevision to Revenue
Management strategies (over forecasting can result in expecting
more guests than actually will show up, with the risk of a
decreased occupancy, under forecasting expecting less guests,
hence a bad overbooking situation)
Labor Scheduling (thanks to good forecasting it is possible to
determine the exact amount of employees are needed on any
given business day)
Purchasing
19. Elements of Forecasting
• Demand Calendar( Seasonality , holidays etc)
• Historical Demand and Booking Patterns
• Past Statistics ( from your PMS)
• Business on the books
• Calculated Risk
21. Revenue Management Strategies
• Test you BAR pricing- When change your BAR prices monitor the change in your
bookings. Based on the response you will know what the market is willing to pay
for a room at your hotel.
• Try A Short Term Sale: Try an offer which has limited booking period. Do a 48
Hour sale.
• Invest In An Upsell Program: This can be at the Front Desk or give the visitor an
opportunity to upgrade the room at a discount during the booking process or
after the room has been booked.
• Special Offer Outside Booking Window: Check the booking window of your
property and offer a deal outside the booking window.
• Market Segmentation: Break your segmentation down even further by building a
guest profile tied back to the offer they booked previously.
• Value Add Offers: When you are deciding on what offer to promote or just
simply drop prices to get rooms think about doing value adds
23. Revenue Management Strategies
• Revenue streams management
• Strategic packaging
• Distribution channel management:
− voice channels
− GDS channel
− Internet channels, such as B2C model
(hotel direct), agency model, merchant
model, hybrid model, opaque model
24. Revenue Management Strategies
• Forecasting
− Forecasting demand
− Pick Up reports
• Tactical rate management
− Best available rate (BAR)
− Tactical discounting
− Dynamic pricing
• Stay (duration) control through:
− minimum-stay requirements
− stay through
− close to arrival
25. Measurements
Internal Measures
1.Revenue
2.Occupancy %age
3.Average daily rate / Average room rate (ADR / ARR)
4.Revenue per available room (RevPAR)
5.Contribution margin (net revenue)
6.Gross operating profit per available room (GOPPAR)
7.Total revenue per available room (TRevPAR)
8.Total revenue per available customer (TRevPAC)
26. What do you think
Which operating position is
better?
Date Occupancy Average Rate
14 May 95% $165
15 May 65% $240
X
X
= $156.75
= $156.00
27. Measurements
Occupancy (OCC)
Occupancy % = Paid Rooms Occupied / Rooms
Available x 100
OR
Occupancy % = Revenue per Available
Room / ADR
EG
Occupancy %
= 50,000 / 100,000 = 50% OCC
28. Measurements
Revenue per Available Room (RevPar)
RevPar = Total Room Revenue / Total Rooms Available
OR
RevPar = Occupancy % X Average Daily Rate (ADR)
EG.
RevPar = $ 5,000,000 / 100,000 = $50 RevPar
29. Measurements
Average Daily Rate (ADR)
ADR = Rooms Revenue / Paid Rooms Occupied
OR
ADR = Revenue per Available Room / OCC %
EG.
ADR = 50 / 0.50 = $100 ADR
30. Measurements
Market Penetration Index (MPI)
Hotel performance metric measures how your hotel’s
occupancy compares to a competitive set. This measures
your ‘piece of the pie’. Results above 1 indicate above
market performance indicate above market performance.
MPI = Hotel Occupancy % / Market Occupancy %
EG.
MPI = 50% / 40% = 1.25 MPI
31. Calculate each hotel’s MPI
(Market Penetration Index):
Hotel &
Comp Set
Room
Occoupancy
Market Penetration
Index
A 60%
B 50%
C 32%
D 59%
E 72%
Total 54.6%
1.09
0.91
0.58
1.08
1.31
33. Measurements
Average Rate Index (ARI)
Hotel performance metric measures how your hotel’s
average daily rate compares to a competitive set. An ADR
Index of 100 means you have a fair share of the
competitive set’s ADR performance. Like MPI but
depending on your hotel’s business goals, you would
typically aim for ARI above 1.
ARI = Your Hotel’s ADR / Hotel Market ADR
34. Measurements
Average Rate Index (ARI)
Hotel performance metric measures how your hotel’s
average daily rate compares to a competitive set. An ADR
Index of 100 means you have a fair share of the
competitive set’s ADR performance. Like MPI but
depending on your hotel’s business goals, you would
typically aim for ARI above 1.
ARI = Your Hotel’s ADR / Hotel Market ADR
35. Measurements
Revenue Generation Index (RGI)
Hotel performance metric measures how your hotel’s RevPar
compares to their competitive set. Most of the international and
branded hotel operators use the RGI hotel performance metric
obsessively. Enhancing the RGI is often a great way to maximise
hotel profitability. look at your daily RGI results and analyse
trends, benchmark competitors and revenue management
tactics.
RGI = Your Hotel’s RevPar / Hotel Market RevPar
37. Measurements
External Measures
Market penetration Formula
Market average occ %age
Market average ADR / ARR
Market average RevPAR
Total room nights sold / total available x100
38876 / (1775 X 30) X 100
= 73%
Total room revenue / total room nights sold
5082827 / 38876
= $130.75
Ave market ADR x Ave market occ %
$130.75 X 0.73
= $95.45
38. Calculate each hotel’s fair share
(capacity market share):
Hotel &
Comp Set
Number of
Rooms
Capacity Market
Share
A 205
B 225
C 400
D 460
E 485
Total 1775
11.5%
12.7%
22.5%
25.9%
27.3%
100%
40. Hotels in
Comp
Set
Number of
Rms
Capacity
Market
Share
Occ % Occ Penetration ARR
$
ARR
Pen(ARI
)
Rev
PAR
$
Rev PAR
Pen(RGI)
A 205
B 225
C 400
D 460
E 485
Total 1775
11.5%
12.7%
22.5%
25.9%
100%
27.3%
87.7%
93.2%
97.3%
105.5%
105.5%
121.6%
113.2%
104.0%
92.5%
91.0%
64%
68%
71%
77%
77%
159
148
136
121
119
101.76
100.64
96.56
93.17
91.63
106.6%
105.4%
101.2%
97.6%
96.0%
Market average occ %age = 73%
Market average ADR / ARR = $130.75
Market average RevPAR = $95.45
A penetration index greater than 100% is a measure of a
market penetration that exceeds market average, while
indexes lower than 100% show that the indicator did not
reach the market average.
95.4573% 130.75
